TASE Clearing House

​TASE Clearing House

The TASE Clearing House is a subsidiary of the Tel Aviv Stock Exchange. The Clearing House provides the following clearing and custody services:

Clearing transactions in securities traded on the TASE and in the MTS system - a European trading system in which, among other things, government bonds of the State of Israel are traded.

Clearing transactions executed outside the TASE and transfers to a custodian.

Clearing of creation and redemptions of mutual find units

Custody services that include registration of the securities traded on the TASE in the credit of Clearing House members

Clearing of the rights attached to the securities and to mutual fund units registered to the credit of Clearing House members, including in respect of interest payments, redemption, dividend, etc.

Clearing of transfer orders of securities traded simultaneously in Israel and the United States through its account at DTCC, which is the central clearing house in the United States that provides clearing and custody services for securities in the United States.

​The company sets a particular date (the record date) at the end of which anyone holding the security will be entitled to payment from the company.

Can a payment from a company be waived?

A request to waive entitlement to receive a company payment (dividends, interest, etc.) on a security can be submitted by means of the Clearing House member with whom the security is held, i.e., through the bank/broker with whom the client’s account is maintained.

How are orders for the creation/redemption of mutual fund units to be submitted?

Orders for the creation and redemption of mutual fund units are to be effected by the giving of an instruction to the Exchange member with whom the investment account is maintained. Orders for the creation or redemption of units can be given on any Exchange trading day up to the designated hour set by the fund manager. The clearing of an order is carried out on the following business day (T+1).

How is the clearing of creation/redemption orders carried out in the case of overseas funds?

In the case of overseas funds, creation and redemption orders can be submitted on Mondays-Thursdays. The clearing of the orders is carried on the following business day (T+1) with last known unit/redemption price. At the following clearing day (T+2) the creation and redemption orders will be cleared according to the redemption/unit price as revaluated by the representative member transmission to TASE systems.

Orders to create and orders to redeem of a fund that are cleared in foreign currency, which the Clearing House received on any day up to the designated hour, shall be cleared by the Clearing House in the first clearing round on the first business day on which the Bank of Israel performs foreign currency clearing after the day on which the orders to create or orders to redeem. The Clearing House preform clearing of creation and redemption orders in US dollars only.

Where can information be obtained regarding historical securities or printed share/bond certificates?

​Inquiries regarding historical securities (bearer or registered certificates) or regarding such securities that are no longer listed for trade should be addressed to the bank/broker with whom the account is maintained. Inquiries may also be addressed to the company’s corporate secretary and, in the event of the company details not being known, inquiries may be addressed to the Registrar of Companies.

What are the rules regarding securities that have ceased to be traded and the client pays custody fees to the bank?

​Currently, all members of the Clearing House (banks and brokers) are charged “account management fees” for holding securities of their clients at the Clearing House. In order for a Stock Exchange Clearing House Member (a bank or a broker) not to pay the account management fees to the Clearing House, it must withdraw the security which is currently registered in the name of the nominee company and make a request to the company that the security be registered in the name of the final client. Currently, in accordance with the By-Laws, the Clearing House does not permit such a withdrawal from the nominee company and registration of the security in the name of the client, except in exceptional instances, such as when a company is delisted.

In the case of a company that has been delisted from the Exchange, there are situations when neither a company nor a legal entity can issue a new certificate in the name of the client on behalf of the company.

Nominee companies propose to the client that it signs a waiver form in respect of the securities; after the client has signed the waiver form, the securities are transferred to a special account at a bank where the rights attaching to the securities at any given moment are retained. If at some future time the company publishes a notice regarding any payment in respect of those securities, the bank will contact the client to inquire whether it wishes to receive the payments being distributed, and provided that the client pays the bank the cost of the account management fees for the period that the bank has been holding the securities. If the client refuses to pay the account management fees, the bank will not transfer any payment to it.

Can a security be withdrawn from the Clearing House and be registered in the name of the client?

The Clearing House By-Laws prescribe that a client does not have the right to withdraw shares from the securities registered to his credit with a member and to have them registered in his name in the issuer's register of shareholders. The exceptions to the aforesaid are specified in section 5 of Chapter Three in Part Two of the By-Laws.

How can shares be transferred from the US to Israel and vice versa, when shares cannot be transferred by means of the Clearing House account with the DTC, due to an insufficient quantity at the Clearing House account? How long the process takes?

​In the case of a share that is traded in the United States and in Israel and which cannot be transferred by means of the Clearing House account with the DTC and is not an ADR, the transfer will be effected by means of a physical withdrawal of the certificate from the United States/Israel and converting the certificate through the company into an Israeli/US certificate, respectively.

The process for transferring shares from Israel to the United States and vice versa other than by means of the Clearing House account with the DTC usually takes several weeks and depends on the parties involved in the process (the nominee company, the company and the Transfer Agent in the United States).

​A transaction in securities which is conducted outside the Exchange system between two parties that wish to exchange a quantity of shares between themselves, at a price agreed between them, rather than at the price at which the share is actually traded on the Exchange.

How are off-Exchange transactions carried out?

​A summary of the transaction details is drawn up between the clients/the parties to the agreement, while the reporting of off-Exchange transactions is carried out by Clearing House members to the Extranet system. Both the buyer and the seller are required to report and the Extranet system first matches the purchase order and the sale order and then transfers the transaction for clearing on the next business day.

Can an off-Exchange transaction be carried out in the securities of a company that has been delisted?

There is an option in the Extranet system for the Clearing House to conduct an off-Exchange transaction in delisted shares through one of the Clearing House members. It should be borne in mind that this is not a trading system, but rather a reporting and clearing system and thus a buyer first has to be found for the securities.

How can the off-Exchange transactions reported for a particular day be viewed?